For a business refinance, what security can be used — assets, equipment or commercial property?

Summary: When refinancing business debt, lenders commonly accept commercial property, plant & machinery, vehicles, stock and receivables as security. The form of security you offer affects how much you can borrow (LTV), the interest rate, and required legal documentation (debenture, charges, personal guarantees). Smaller or more specialist assets (IP, contracts) need specialist lenders. Complete a quick, no-obligation Free Eligibility Check to see which lenders could take your security and offer competitive refinance terms. Get a Free Quote (takes ~2 minutes).

Quick summary — key takeaways

• Commercial property is the highest-value, most common security for larger refinance deals.
• Plant, machinery & equipment are accepted by specialist asset lenders or via a debenture with fixed charges.
• Stock & receivables work well for working-capital refinances (invoice finance or stock-secured facilities).
• Personal guarantees and company debentures are frequently required in addition to asset security.

Free Eligibility Check — takes around 2 minutes and is not an application.

Why security matters in business refinancing

Lenders take security to reduce credit risk. Offering acceptable collateral usually unlocks larger facilities, lower interest rates and longer terms. In contrast, unsecured refinance options typically carry higher rates and smaller amounts. The trade-off is simple: the stronger and more marketable the security, the better the deal you can usually obtain.

Important: UK Business Loans is an introducer that connects limited companies with lenders and brokers. We do not provide loans or regulated financial advice — completing an enquiry helps us match your business with lenders or brokers who can provide tailored quotes.

Which types of security do lenders accept?

Below are the common security types used for refinancing, how lenders treat them and practical considerations for each.

Commercial property (freehold & leasehold)

Commercial property — warehouses, factories, offices, retail units — is the most common and highest-value security for refinance loans. Lenders favour property because its market is relatively deep and valuations are well-understood.

Freehold vs leasehold: Freehold titles give lenders straightforward security: a first legal charge over the deed. Leasehold properties are treated differently — lenders will review lease length, covenants and landlord consents. Short leases or onerous terms reduce lending appetite and LTV.

Valuation & LTVs: Expect a formal valuation (often RICS) and Land Registry checks. Typical LTVs for refinance vary widely — common ranges are 60–75% for stable income-producing property, lower for specialist or short-lease assets. Development or secondary-sector properties attract lower LTVs and stricter covenants.

Practical issues: Check for existing charges, rent arrears, planning constraints, environmental contamination risks and the EPC rating — some lenders now factor energy performance into their underwriting. Legal fees, valuation costs and registration of charges at Companies House are usual parts of the process.

Example: a manufacturer refinanced a freehold workshop at 65% LTV to pay off higher-rate short-term loans and fund equipment replacement.

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Plant, machinery & equipment

Machinery, production lines, specialist plant and business vehicles can all be used as security. There are two main routes:

• Asset finance / equipment refinance: Specialist lenders provide loans or hire-purchase/lease arrangements secured against the specific equipment.
• Company charges over assets: For wider refinancing, a lender may take a fixed legal charge over named equipment or include them in a debenture covering company assets.

Key underwriting factors include independent valuations, proof of ownership, maintenance records and obsolescence risk. Mobile, easily re-sellable equipment (e.g., construction plant, vans) generally attracts better terms than bespoke machinery with limited secondary markets.

Valuations are typically done by specialist valuers. Lenders may apply haircuts to book values to allow for depreciation and resale costs.

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Stock, inventory & receivables

For working-capital refinances, lenders often accept receivables (invoices) and stock as security:

• Invoice finance / debtor finance: Lenders advance against outstanding invoices — often the quickest way to unlock cash without property security.
• Stock-secured lending: Possible but requires tight controls: audited stock, good warehousing, insurance and regular reporting.

Expect valuation discounts and seasonality adjustments. Invoice finance providers focus on debtor quality and concentration risk, whereas stock-lenders will factor in liquidity and storage costs.

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Intangibles: IP, contracts, recurring revenue & fleets

Intellectual property (patents, trademarks), long-term contracts or subscription revenues can be used as security, but they require specialist lenders who can value these assets. Lenders will look for predictable cash flows and clear ownership rights.

Vehicle fleets are commonly refinanced via vehicle finance specialists who take charges over individual vehicles or the whole fleet.

Personal guarantees, debentures and charges

In addition to asset security, lenders commonly require:

• Director / personal guarantees — personal liability if the company defaults; this is common where company balance sheet strength is limited.
• Debenture (fixed & floating charges) — a debenture can create a fixed charge over specific assets and a floating charge over general circulating assets (stock, receivables). A floating charge “crystallises” on insolvency, converting to a fixed charge.

Priority matters: fixed charges rank above floating charges. Registrable charges must be filed at Companies House — lenders check existing charges before lending. Always seek independent legal advice before signing guarantees or granting charges.

How lenders value security and what affects terms

Valuation methods include market comparables (property), RICS valuations, and specialist appraisals for equipment and IP. Lenders discount for depreciation, obsolescence, marketability and costs to realise an asset. The perceived stability of the sector (e.g., long leases in logistics vs. short-term retail leases) also affects interest rate, LTV and covenant structure.

Alternatives to secured refinancing

If you prefer not to provide security, options include unsecured business loans (usually smaller and pricier), invoice finance, peer-to-peer lending, mezzanine finance (subordinated, higher-cost debt often with warrants) or equity investment (dilution trade-off). Sale & leaseback can free capital tied in equipment.

The refinance process — practical checklist

Prepare early to speed approval:

• Compile accounts, an up-to-date asset register and recent valuations or photos of equipment.
• Gather property deeds/leases, insurance and EPC for property-backed requests.
• Check Companies House for existing charges.
• Complete a quick enquiry via UK Business Loans — we match you to lenders/brokers who specialise in the security you can offer.
• Expect valuation and legal fees, lender due diligence (days–weeks), solicitor involvement and registration of charges.

Typical costs: valuation fees, legal fees, and possible early repayment charges on existing facilities. Typical timescales vary by security: invoice finance can be set up quickly; property-backed refinances usually take longer.

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Risks, legal & tax considerations

Granting security or signing personal guarantees exposes you to the risk of losing assets if you default. There can be tax implications (e.g., disposal of assets, sale & leaseback VAT rules) and corporate governance considerations. Obtain independent legal and tax advice before finalising any security documents.

Important reminder: completing an enquiry on our site is not a loan application — it helps us match you with lenders or brokers who can provide quotes for loans (minimum typical loan size from our partners is around £10,000 and upwards).

Frequently asked questions

Can I refinance without offering security?

Yes — but unsecured refinance options are usually for smaller amounts and come at higher rates. Invoice finance is an unsecured alternative that focuses on your debtor book.

Will giving security mean I lose everyday control of the asset?

Not necessarily. Most charging arrangements allow you to continue using assets unless you default. For leased equipment, you will need the lessor’s consent.

Does completing an enquiry affect my credit score?

No — submitting your details to UK Business Loans does not affect your credit file. Lenders may carry out checks later in the application process.

How long does registration of a charge take?

Registration at Companies House is relatively quick, but legal completion (solicitors, final documents, lender processes) commonly takes several weeks for property-backed refinances.

Are intangible assets good security?

Sometimes — specialist lenders will consider IP and subscription contracts, but valuations are complex and these assets generally attract lower LTVs.

Do I always need a valuation for equipment?

Most lenders require an independent valuation for material assets to determine lending value and resale assumptions.

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Ready to compare refinance quotes?

If you’re considering refinancing, tell us what security you can offer and we’ll match you with lenders and brokers that specialise in your sector and asset type. Our quick enquiry is free, confidential and not an application — it helps lenders make an initial assessment so they can return a tailored quote.

Note: For background reading on different refinance structures and options, see our detailed refinance resource on refinance loans: refinance loans.

Get a Free Quote — quick, no obligation, and suitable for loans from around £10,000 upwards.

1. What types of security can I use to refinance business debt?
Common security for refinance loans includes commercial property (freehold or leasehold), plant & machinery, vehicles, stock and receivables, plus specialist assets like IP or contracts with specialist lenders.

2. Can I refinance without offering security?
Yes — unsecured business loans and certain invoice finance or peer-to-peer options exist, but they typically offer smaller amounts and higher rates than secured refinance.

3. How much can I borrow against commercial property or other assets (LTV)?
Lenders’ LTVs vary by asset and risk—commercial property often attracts 60–75% LTV for stable assets, while equipment, stock and intangibles usually receive lower LTVs after haircuts.

4. Will completing an enquiry on UK Business Loans affect my credit score?
No — submitting a free eligibility enquiry does not affect your credit file, though lenders or brokers may carry out credit checks later if you proceed.

5. How long does the refinance process usually take?
Timescales vary: invoice finance can be set up quickly (days), equipment finance weeks, and property-backed refinances commonly take several weeks for valuations, legal work and registration.

6. What fees and costs should I expect when refinancing?
Expect valuation and legal fees, Companies House charge-registration costs, possible early repayment or exit fees on existing debt, and adviser or broker fees depending on the deal.

7. Do I need independent valuations for equipment or property?
Most lenders require independent valuations—RICS for property and specialist appraisers for plant and machinery—to determine lending value and resale assumptions.

8. Will lenders require personal guarantees, debentures or registered charges?
Often yes — lenders frequently ask for director personal guarantees and company debentures (fixed and/or floating charges), which should be reviewed with independent legal advice.

9. What alternatives are there if I can’t or won’t offer security?
Alternatives include unsecured business loans, invoice or debtor finance, mezzanine/subordinated debt, equity investment, peer-to-peer lending, or sale & leaseback of equipment.

10. How do I start a free eligibility check and what information is needed?
Begin by completing UK Business Loans’ quick online enquiry with basic business details, funding needs and the security you can offer — it’s free, confidential and not a loan application.